Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 11, Problem 5NP
a.
To determine
To derive: The equation that provides a relation between the real wage and the amount of labor demanded by the firms.
b.
To determine
For the nominal wage of 20, derive the relation between price level and the amount of labor demanded by firms.
c.
To determine
To describe: The relationship between price level and the amount of output supplied by the firms and put it on the graph.
Supposing that the IS and LM curves of the economy (the goods market and the asset
e.
To determine
To derive: The relationship between output, Y and P. Graph it on the same axis as the relationship between the price level and the amount of output supplied by firms, the
e.
To determine
To derive: The equilibrium values of price level, output, real wage, real interest rate, and employment.
f.
To determine
To describe: The equilibrium values of price level, output, employment, real wage and real interest rate if M is 135.
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Suppose the number of employed people in Pakistan is 20.5 million. The unemployment rate in this economy is 8.8 percent, and the labor force participation rate is 65 percent.
What is the size of the labor force and working-age population?
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Explain and analyze different government policies which affect the unemployment rate in Pakistan? ( Maximum 200 words).
Before June 2020, the labor market in Pakistan was at equilibrium with an equilibrium wage (WE) of Rs. 15,000 and equilibrium quantity of labor (LE) 10 million. In the last week of June, 2020, government of Pakistan imposed a minimum wage Act raising the minimum wage to Rs. 20,000. Using a graph, explain the effect of imposition of minimum wage on unemployment in labor market of Pakistan .
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